Arizona Economic Update & Outlook

Arizona Economic

Update & Outlook

ASU/JPMorgan Chase

Forecast LuncheonDecember 2, 2015

[email protected]

Arizona Recovery – Are We There Yet?

Lost Jobs Regained by 2016

• Historically A Growth Leader

• But Recession Hit Earlier, Harder

• Economy Paused in 2014, 2015 Better

• New Job Mix is Emerging

• Long Term Outlook is Positive

ARIZONA Economic Outlook

Indicators 2014 2015 2016

Personal Income (%) 4.7 4.5 5.2

New Jobs (thousands) 47.8 61.6 68.0

Employment (%) 1.9 2.4 2.6

Population (%) 1.5 1.6 1.7

Single Family Permits (%) -8.0 25 30

5

9

8

AZ Ranks 20th in First Half

Personal Income Growth

Percent Change First Half 2015

20

U. S. Bureau of Economic Analysis

37

37

6

33

15

2

1

4

1018

Top 10 Growth States

Arizona Now Ranks in the

Bottom 10 States for

Per Capita Personal Income

What’s Going On?

“Growth” States Per Capita Income Rank

Fell…And Energy States Boomed

Construction/Growth States Rank 2006 Rank 2014 Change

Nevada 15 34 -19

Arizona 26 41 -15

Florida 17 28 -11

Georgia 29 40 -11

Energy/Resource States Rank 2006 Rank 2014 Change

North Dakota 40 4 +36

South Dakota 33 23 +10

Oklahoma 36 27 +9

Texas 25 22 +3

U. S. Bureau of Economic Analysis, Sept. 30 2015

FACT OR FICTION?

“Arizona is too reliant on population

growth and construction. “

Arizona Indicator 2006 2014

Annual Job Growth (-80,000) 127,000 47,800

Number of All Jobs (-71,000) 2,639,000 2,568,000

Manufacturing Jobs (-30,000) 186,000 156,000

Construction Jobs (-115,000) 240,000 125,000

Population Growth (-94,000) 190,000 96,000

Poverty Rank (-6) 36th 42nd

Per Capita Income Rank (-15) 26th 41st

Reality Check: 2006 vs 2014

U. S. Bureau of Labor Statistics, U.S. Census Bureau,

U.S. Bureau of Economic Analysis

Jobs Recovery Slower Than U.S.

• Arizona was hit hard in the recession,

losing more jobs (12%) than the US (6%)

• U.S. Regained Lost Jobs in May 2014

• Arizona has regained 88% of lost jobs

• Phoenix has regained 97% of lost jobs

• Tucson has regained 62% of lost jobs

U.S. Bureau of Labor Statistics, data through October 2015

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

40,100

-56,900

-189,900

-46,400

25,900

51,400 51,700 47,80061,600

68,000

Forecast

Arizona Recovers Lost Recession JobsAnnual Employment Change

As of October, Arizona needs

36,000 more jobs to return

to prior peak employment of

2,686,000 in October 2007

1

Ranked by % Change

Year To Date Oct. 2015

5

12

932

4

11

47

7

13

6


U. S. Bureau of Labor Statistics

45

3

Arizona Ranks 13th Among All

States In Year-to-Date Job Growth

2

8

10

39

Arizona Industry U.S. Rank % Growth

All Private Industry 9 2.7

Finance & Insurance 2 6.0

Personal Services 4 6.0

Prof/Technical Services 6 5.2

Information 8 2.8

Retail Trade 10 2.5

Arizona Job Growth Rankings

U. S. Bureau Labor Statistics

(Rank by Growth Vs. All States Year/Year October 2015)

Industry New Jobs Wage

Private Industries 59,700 $46,500

Professional, Tech 6,700 $73,300

Finance/Insurance 8,600 $68,600

Health Care 9,500 $48,800

Construction 4,700 $48,600

Retail Trade 7,700 $30,000

Food Services 6,400 $17,000

Source of 75% Of New Jobs(Jobs Added 12 Months Oct. 2015 vs. Oct. 2014)

U. S. Bureau of Labor Statistics

New Jobs Past 12 Months:

Mix of High, Average, Low Pay• 15,300 knowledge Jobs (professional,

finance) paid well above average wages

• 14,200 skilled jobs (construction, health

care) paid about average wages

• 14,100 lower skilled jobs (food service,

retail) paid below average wages

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

3.3 3.3

2.3

1.8

1.0 1.0 0.9

1.3 1.21.5 1.6 1.7

Forecast

Arizona Population Growth Remains

Below Historical Average (3.2%)*

*Average is 1977 - 2007

Annual Percent Change

Arizona population has

not

grown by 2% since

2007

U. S. Census Bureau

1

15

3

26

9

Arizona Ranked 5th in U.S.

Absolute Population Increase

5

U. S. Census Bureau, Dec. 2014

4

1345

7

8

36

2 10

47

6

1423


1

2

5

Arizona 3rd in Domestic Migration

3

607,000 Domestic Migrants


9

7

4

8 6

10

30 States in Red Lost Residents to 20 States in Green

1

2

5

Arizona 17th in International Migration

3992,000 International Migrants


9

7

4

8

6

10

All States Added International Migrants

17

1924

26

33

38

43

48

50

12


2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

55,633

37,666

19,153

12,82610,755 10,306

16,18918,386 16,841

21,000

27,500

Arizona Home Building Improves Single Family Permits Up After 2014 Slowdown

Forecast

8% Fall

25% Rise

30% Rise

U. S. Census Bureau

ArizonaUSA

US and Arizona Home Ownership Rates

Decline to Lowest Level Since 1967

U. S. Census Bureau

0

100

200

300

400

500

600

700

800

900

1000

Under 10 10 - 19 20 - 29 30 - 39 40 - 49 50 - 59 50 - 69 70 - Up

Millennials (20-29) Largest Population Group

- When Will They Become Home Buyers?

20 – 29 Years Old

Arizona Population (000)

Arizona Outlook Summary

• 2016 – best recovery year yet – but still

below long term average growth rates

• Population growth (relatively) slow

• Knowledge jobs – the new driver

• Global economy is short term risk

• Job quality greatest long term risk

No Doom – No Gloom – No BoomBut 2016 Best Year Yet for Arizona Recovery

Arizona Economic

Update & Outlook

ASU/JPMorgan Chase

Forecast LuncheonDecember 2, 2015

[email protected]

Arizona Economic Update & Outlook

Documents